THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ERIN BURNETT, HOST: Thanks John. Mitt Romney wins big, but there is no time to rest in this one. Can he make South Carolina a trifecta and what about the Ron Paul factor?

And an Iranian nuclear scientist murdered; the fourth murder in two years. Is America behind it?

And a terrible video posted today. It appears to be American Marines urinating on dead bodies.

Let's go OUTFRONT.

Well good evening everyone. I'm Erin Burnett and OUTFRONT tonight, breaking news. We have very disturbing video of what appears to be U.S. Marines urinating on dead bodies. Now, the video is so disturbing, we're not going to air it in full. This is a snapshot. As you can see, it shows four men urinating on three dead bodies which are sprawled out in front of them.

Now we have, as you can see, pixilated and blurred their genitalia, as that was too disturbing to show. It's a 40-second video and it surfaced online today on YouTube and a Web site called TMZ.com. Now in it one man says quote, "have a great day, buddy", another jokes, quote, "golden, like a shower" and a third is heard checking to see whether all of this was caught on camera.

Now, it's unclear who shot or posted this video and frankly, it's also unclear who the people pictured in it were or where it was shot. Pentagon correspondent Barbara Starr is on the story. Barbara it was amazing when this happened very late this afternoon. It was disturbing and hard to watch. Let me ask you what the reaction is from the Pentagon overall and also about what you can tell us about its authenticity.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Erin, good evening. You know a senior Pentagon official came right out and said that he called the video disgusting, said it turned his stomach, so now, what is happening is the Marine Corps is launching an investigation. They want to nail this down as fast as they can.

Who are these people in the video? Are they in fact Marines? Every reason to believe they are. Where were they serving? What transpired here and can they bring charges against these people? This is desecration of dead bodies in a war zone. Are there charges to be brought? Is there legal action to be taken under the military justice system?

BURNETT: And Barbara what can you tell us about how they're trying to figure out who those people are or where they are, what clues are there within that video?

STARR: There are plenty of clues and they may be able to give focus on this very, very quickly. A senior Marine I spoke to this evening said, just look at that picture. You see those Marines carrying sniper rifles. You see them with very specific helmets on that are very particular to Marine sniper teams.

Shorter front, shorter sides, so the Marines could hold their sniper rifles and their scopes right up to their faces when they take a shot. Marine sniper teams usually travel in a six-man unit in very isolated areas. That may be how this happened. They are very aware of what sniper teams who are out there in the past few months, where they were, mainly in Afghanistan of course, and they are going to be talking to them and trying to pin this down as fast as they can, Erin.

BURNETT: All right, well thank you very much, Barbara Starr. Of course, sniper teams some of the most highly specialized trained and talented people out in the field. Fran Townsend is a former homeland security adviser and our national security contributor here at CNN. Major General Spider Marks is former commanding general of the U.S. Army Intelligence Center. Good to have both of you with us. General Marks, let me start with you. What's your reaction when you see this? Are you shocked that this sort of thing happens or is this something that as awful as it is you know happens and you're shocked the fact that they videotaped it?

MAJ. GEN. SPIDER MARKS, U.S. ARMY GENERAL (RET.): No, I'm shocked that it took place. This is absolutely outside the bounds of anything that's trained or is acceptable and these young men know that and I can't explain their behavior. I need to tell you the Marine Corps will jump all over this. They'll investigate this and there will be some -- there will be some accountability that will come from this.

BURNETT: Fran, let me ask you, I know obviously you were advising the Bush administration when the Abu Ghraib pictures started coming out. Those started in a trickle and then became something more. Does this to you feel like an isolated event or --

FRANCES FRAGOS TOWNSEND, NATIONAL SECURITY CONTRIBUTOR: Look, based on what we know at the moment, it does look like an isolated event, but what you have to understand and what gets lost to people around the world when they see this picture and this horrible video is that this is contrary to U.S. policy, it's illegal. It's against the uniform code of military justice and that's why there will be an accountability review. But what happens is it gets a life of its own and so it's used by people like the Taliban and al-Qaeda to recruit, to train, to inspire and to raise money. And so it has -- and awful as it is in and of itself it has consequences that go on far beyond just this story.

BURNETT: General Marks, I mean what is your view on what its implications will be as Fran said on funding and on recruitment? I mean this is -- it is a horrific travesty.

MARKS: It's absolutely horrendous. It's egregious and again it's nothing that is within any norm.

BURNETT: Right.

MARKS: So to answer your question, it has everything to do with recruiting of our enemies, as Fran indicated. It has less to do with the Marine Corps or our Department of Defense in terms of bringing great young men and women on board. I'm not concerned about that. Sadly, behavior like this often occurs, it's really very aberrant. This is a digital form of scalping. It's just -- it should not have occurred and I know that chain of command is going to figure out why.

BURNETT: Do you think that there will be strikes at U.S. soldiers that people could lose their lives because of this? I know that people say that that might happen. Do you think it will happen and Fran, jump in and let me know whether you know, whether you think that actually did happen as a result of Abu Ghraib or that was just what people assumed happened.

MARKS: If I may, we don't know when this -- this was posted recently. We don't know when this occurred.

BURNETT: Right.

(CROSSTALK)

BURNETT: But now it's being seen.

(CROSSTALK)

BURNETT: This is going to be seen around the world on this show.

MARKS: It's completely timed now.

BURNETT: Right.

MARKS: It's a media. So, there may be some direct results. I would doubt that. What this has to do is exactly what Fran talked about. It's worldwide recruiting. It's a black eye for the United States and our alliance and our friends in Afghanistan.

TOWNSEND: And you run the risk that our enemies will use this sort of a video --

BURNETT: Right.

TOWNSEND: -- as a justification for mistreating U.S. soldiers who are either captured or killed and so (INAUDIBLE) may it have that effect, yes and it will be used as an excuse by our enemies.

BURNETT: General Marks, how high do you think this sort of thing goes? I mean we were just hearing from Barbara Starr that this is you know sniper teams. These are elite, highly trained guys. They go in groups of six as she was reporting in the Marines. How high could this go? Could laughing at this, seeing this, knowing about this go?

MARKS: It doesn't go beyond this team. I need to tell you --

(CROSSTALK)

MARKS: Absolutely. Everybody in this team's chain of command, they're no longer elite. These guys are outside the norm. This really makes you upset and everybody in this team's chain of command right now are trying to figure out why these guys, guys that we trusted, Marines that we put in incredible positions, trained them immensely. We ejected them with our military ethos and they do this? Everybody in that chain of command right now is trying to figure out what broke down.

BURNETT: How does this happen? I mean as someone who's a general, this happened at Abu Ghraib and it was shocking and it was known to be totally inappropriate then to treat people -- torture, to do something as awful and horrendous as defecating on a dead body, and yet it happens.

MARKS: Up until the point that we saw that video, we have no clue. I'm not justifying the action.

BURNETT: Right.

MARKS: We have no clue what these young men had gone through up until that very moment, but they are trained that once their job is done, they get very agnostic, they get very focused and they do what they have to do to respect and honor those that they just killed. They might have slaughtered those guys and that's fine. You then move off to your next mission. You don't do what we just saw.

UNIDENTIFIED FEMALE: Right.

TOWNSEND: Erin, the point here is look given how trained they were and what their mission was, it is entirely possible they went through a horrendous fire fight over a protracted period of time and saw their teammates or others wounded or killed. And that -- as General Marks says, that doesn't justify, nothing justifies the behavior in that video, but you have to understand that in the heat of the moment, in the battle, the adrenaline pumping --

(CROSSTALK)

TOWNSEND: -- and you need to understand that so you can prevent it in the future. That's why you do the review --

BURNETT: Thanks very much to both of you. We appreciate it and we'll continue to keep everyone updated as we find out exactly the province of that video and the identities of the young men that you saw there.

Well Newt admits he crossed the line. Will the man who called Mitt Romney a vulture follow suit? And the fourth Iranian scientist murdered in two years, who's behind it? Iran says America. Is it true? And disturbing new details in the Casey Anthony case, we've got newly unsealed documents today and something shocking in there, allegations that Casey's father may have sexually abused his granddaughter, Caylee, the little girl who died.

(COMMERCIAL BREAK)

BURNETT: Mitt Romney is celebrating last night's landslide win in New Hampshire, but he's feeling the heat with the tax on the one thing he's touted as his qualification for being president, running Bain Capital. Texas Governor Rick Perry compared Romney to a vulture capitalist and accused him of getting rich while hundreds of workers lost their jobs.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R), PRESIDENTIAL CANDIDATE: They're vultures. They're sitting out there on the tree limb waiting for the company to get sick and then they swoop in. They eat the carcass. They leave with that and they leave the skeleton.

(END VIDEO CLIP)

BURNETT: The front-runner shot back saying it shows just how desperate his rivals are.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: But you saw last night that that approach didn't work very well for either Rick Perry or Newt Gingrich and so we'll take it to the next level. They'll find new attacks and I think in the final analysis, people want someone who can lead the country back to strength with good jobs and rising incomes and all these attacks I think will fall entirely flat as they did last night.

(END VIDEO CLIP)

BURNETT: All right, the question is, is an attack on Bain Capital an attack on free markets and on America's entrepreneur culture? Steve Forbes is Rick Perry's economic adviser. Of course he's also chairman and editor-in-chief of "Forbes" magazine. Kevin Madden is Romney's former adviser, so a good pairing here tonight, gentlemen.

Let me start off with you, Steve. Gingrich today was asked today by a Santorum supporter about that attack on Mitt Romney and the supporter was saying hey go after Romney for other things, not for this. And Gingrich actually seemed to agree with the supporter. He said -- blaming President Obama here's what he said, quote, "Obama just makes it impossible to talk rationally in this area because he's so deeply into class warfare. I agree with you entirely." So it seems like Gingrich is backing off Mitt Romney. Should Rick Perry?

STEVE FORBES, CHAIRMAN AND EDITOR-IN-CHIEF, FORBES MEDIA: Well I think it's -- first of all, I think you have to make a distinction between equity capital -- I mean equity funds in general. They do perform a real service. But there are some questions with a few of the companies that Bain were involved with where they took out dividends and huge management fees then the company went broke.

Most of it -- they had a very good record long-term, but he should answer those questions on those particulars. That's perfectly legitimate. And I think what you're going to see unfold in South Carolina and then perhaps in Florida is we are going to get some real issues, big issues with Mr. Romney. One is does he have a real good radical tax simplification proposal to put on the table, which Rick does and others have.

He has not done that yet. He's also got to get around this thing of mandates for health care and if he does say something good on the dollar, then he'll be stronger. But this is something that has to be done. He's got to get real proposals on the table, on taxes, on health care, so that people feel that he can lead the party.

BURNETT: And for those who don't know this and a lot of you viewers probably do, but obviously Steve Forbes, the original authors of the whole concept of a flat tax, which is one of the reasons you supported Rick Perry. But when Rick Perry goes into great detail about vultures out on limbs and swooping in and taking over companies, I mean I know you're laughing here, but does that frustrate you a little bit as a guy who sees this and goes, gosh, I wish my candidate weren't talking like that.

FORBES: No, it's colorful rhetoric and it makes the point that Romney has to answer questions about those handful of companies where they did take out dividends and management fees and then the companies went bust. And so he -- if he doesn't deal with it now, he's going to have to deal wit it under more adverse circumstances in the fall.

BURNETT: Which companies? Do you know offhand? I'm just wondering to ask Kevin.

FORBES: I don't, but I know there are two or three where they did take out, "The Journal" referred to --

BURNETT: "The Journal's" story on Monday. Kevin Madden, what's your response to that, that Steve Forbes, he was just saying look, most of these cases Bain did good things, but there are some where they did not and Mitt Romney needs to answer to those questions.

KEVIN MADDEN, FORMER ROMNEY ADVISER: Well look, I think in every instance private equity groups like Bain Capital, what they've tried to do is make an investment, and then they try to make profit on that investment. They try to make an investment in order to help a company grow. Oftentimes, they take over companies that are underperforming or not performing up to potential and they try to bring their potential out of them and they try to make them perform again.

I think that's the genesis of every single investment that you're seeing from Bain and others in that private equity world. I think it's pretty appalling though, the language that you hear from Rick Perry, the language that you hear from Newt Gingrich, which actually echoes that of the very far left. Folks like Michael Moore and MoveOn.org, who are trying to always attack free enterprise and attack economic freedoms. We are not surprised that these sorts of arguments would come up during this presidential campaign.

We fully expect that those on the left and President Obama are going to try and make these, offer up these distortions about free enterprise. What we find surprising is that it would come from fellow Republicans, people who are supposed to defend free enterprise and economic freedoms.

BURNETT: It is interesting. You know Joe Biden was on the same side as Rick Perry, Steve.

FORBES: Well I think "The Wall Street Journal" for example had a very good editorial this morning, actually defending Mitt Romney and the concept of equity capital, having equity funds, but they also did raise the question, he must answer questions about those handful of situations where they went in the company that was weak and prematurely took out dividends and excess management fees. So answering those questions are very legitimate and better to get that out of the way now than in the fall. No one is arguing against the concept of having equity funds going in with companies that are weak, trying to strengthen them up, trying to turn them around. But where you overdid it, took out dividends prematurely, answer the question, very simple.

BURNETT: Kevin --

(CROSSTALK)

BURNETT: Go ahead.

MADDEN: I just -- real quickly -- I mean I think it's -- the reason that Rick Perry is floundering in the polls is that he's totally focused on Governor Romney and criticizing Governor Romney and attacking free enterprise. He's not talking about the future. He's not talking about what he would do as president. The reason Governor Romney is doing so well, the reason that he won in Iowa, the reason he won in New Hampshire and why he's doing -- he's going to do very well in these upcoming primary states is because he's focused about putting -- he's focused on putting the American people back to work --

BURNETT: OK.

MADDEN: -- and telling the American people what he would do for the future.

FORBES: Kevin, to set the record straight, Rick Perry has talked about the flat tax, has talked about excess regulation --

(CROSSTALK)

FORBES: -- economy $1.7 trillion a year. And in terms of your own candidate, when is he going to put on the table a real radical tax simplification program? He's hinted at it in the past, but he hasn't put anything real on the table. He has also told "The Wall Street Journal" in that interview a couple of weeks ago that he's open-minded to a VAT, a value added tax, which would be poison for this country as it has been for --

(CROSSTALK)

BURNETT: All right.

(CROSSTALK)

MADDEN: If you look at the last week -- if you look at this last --

(CROSSTALK)

MADDEN: If you look at this last week (ph), Mr. Forbes, Rick Perry has done nothing but talk about what he would do to attack free enterprise. He's done nothing but talk about what --

BURNETT: OK.

FORBES: Kevin, answer my question.

(CROSSTALK)

MADDEN: And then if you look at Governor Romney's --

(CROSSTALK)

MADDEN: If you look at Governor Romney's programs, he has --

(CROSSTALK)

MADDEN: -- talked in very comprehensive terms about what he would do to make taxes lower, to make taxes flatter. How he would reduce and reform the corporate tax rate so that American companies, both big and small, can flourish, create jobs across the country. He's talking about the economic future of this country and what Rick Perry is engaged in is attacking free market capitalism. I think that we are in a wonderful position right now to win the party, unite conservatives who are absolutely --

(CROSSTALK)

MADDEN: -- filleting Rick Perry and Newt Gingrich --

(CROSSTALK)

MADDEN: Filleting them because --

BURNETT: Hold on, Kevin.

MADDEN: -- attack the fundamentals of free market enterprise.

FORBES: And you're not going to get real unification, whoever the candidate is, unless your guy puts on the table a genuine radical tax simplification program. He's hinted at it. He hinted at it a couple of days ago on another show, but he hasn't put it on the table and he must repudiate the idea of a VAT --

BURNETT: OK.

FORBES: And he's also got to deal with why did he put that individual mandate in Massachusetts on health care --

BURNETT: Quickly before we go, Steve Forbes --

FORBES: He -- yes --

BURNETT: If Rick Perry (INAUDIBLE) does end up leaving the race -- he is lagging in the polls -- who knows what will happen -- but if he does, would you back Mitt Romney?

FORBES: I'll look at the field again and if Mr. Romney has got a good flat tax proposal on the table I'll be very receptive.

BURNETT: And Kevin, do you think Mitt Romney will come up with a further specific tax plan or have we seen what we are going to see?

MADDEN: Yes -- no, I think -- I think this is a great part of these Republican debate and also the general election will be more details coming about what Governor Romney would do to lower taxes, make them flatter, put the economy back on track and then we'll be very welcome to have Mr. Forbes' endorsement when we (INAUDIBLE).

BURNETT: All right --

FORBES: And I'll welcome you to Rick Perry's victory party.

BURNETT: All right, gentleman thanks, good to see you both.

MADDEN: Great to be with you both. Thank you.

FORBES: Thank you.

BURNETT: All right, well Mitt Romney has won in Iowa, he's won in New Hampshire but can he do it in South Carolina? We've got an insider from South Carolina top of the GOP, says it's anyone's game right now. And how much is a nickel really worth these days? This number is sure to surprise you OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: So last night, one of our producers went to 7-Eleven and in his change he got a 1916 wheat (ph) penny. Now when he looked up its value he found that it's worth more than $2.50, yes it's just a penny. But that's not all. One of our other producers, Joe DeWitt (ph), went to the snack machine in our office and he got back a 1920 nickel today. That's worth about $3.50, so all in we're now talking about six cents that's actually worth $6, which is pretty good.

But nowhere near as amazing as the $1.3 million a bidder paid for a penny at a Florida auction this week. The one cent copper coin was minted in Philadelphia in 1793, the first year that the U.S. made its own coins. That's something new. I didn't know that. Well it just goes to show you how much the money in your pocket might actually be worth, which brings us to tonight's number, 20 million.

That is how many nickels hedge fund manager Kyle Bass has wrapped and stacked in a vault at his bank. And he's got a lot of issues with the bank because they're all thinking, you know, come on, why do you want to store so many nickels, (INAUDIBLE) problem, he had to fight with them. And according to Bass, the nickel's 6.8 cent value as scrap metal exceeds the five cent face value and collecting $1 million in nickels is a pretty darn good investment.

He might be right because according to the U.S. Treasury the price of nickel rose 20 percent last year, which is great news for Bass, not so much for his bank and good news for coin collectors. But bad news for our government because due to the increase in metal expenses it now cost 11 cents to make a nickel. Maybe it is cheaper to borrow money from China than to print it, Ben Bernanke.

(BEGIN VIDEO CLIP)

Still OUTFRONT the "OutFront 5". Not so fast.

UNIDENTIFIED MALE: We're asking the good people of South Carolina to join the citizens of New Hampshire and make 2012 the year he runs out of time.

BURNETT: Casey Anthony unsealed.

UNIDENTIFIED MALE: You will hear ugly things, secret things.

BURNETT: All this OUTFRONT in our second half.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BURNETT: So, we start the second half of our show with stories we care about, when we focus in our reporting, do the work, and find the OUTFRONT 5.

First, the U.S. Marine Corps launching an investigation into a video posted on the web that appears to show Marines urinating on corpses.

Our Pentagon correspondent Barbara Starr told OUTFRONT there are a lot of clues in the video that will help track down the men, including their sniper rifle and specific helmet. Starr said the Marine Corps is looking into whether any possible legal action can be taken for desecrating a corpse in the war zone. She was talking about how those groups of snipers in the Marines travel in groups of six.

I think they would be able to identify those men quickly.

Number two, the Food and Drug Administration is now detaining and testing all orange juice imports over fungicide concern. The FDA told OUTFRONT they've received preliminary results on three samples, all were negative. More results are expected later this week. The FDA is starting to test O.J. after an unnamed juice company contacted them after finding low levels of the fungicide Carbendazim. It's not approved for use in the U.S., but is approved in Brazil, where more than half of the imported orange juice comes from.

Ford has announced it's recalling 450,000 minivans and SUVs. Now, this is to fix defects that could cause fires and lose of power. The vehicles affected are 2001 and 2002 Ford Escape, and '04 and '05 Freestar and Mercury Monterrey mini vans.

Ford tells OUTFRONT they're only aware of two minor incidents related to the recall at this time.

Number four, the Federal Reserve released its beige book today. It's an interesting name, but what it boils down to is this: it's a study of regional economies across this country.

We read the report and found some good news. Consumers are spending more. There was a big bump in holiday retail sales compared to a year ago.

But the Fed report does show slow to moderate gains in hiring, salary increases and a flat housing market. The three categories obviously are all crucial to any sort of the sane and significant recovery.

Well, it has been 159 days since the U.S. lost its top credit rating. Every night I ask, what are we doing to get it back?

Last night, Mitt Romney promised he'd help. Now, of course, this was part of a lot of rhetoric, a lot of digs he took at President Obama during his New Hampshire victory speech. But here he is.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: He raised the national debt. I will cut, cap and balance the federal budget.

He lost our AAA credit rating. I'll restore it.

(END VIDEO CLIP)

BURNETT: All right. We don't know now he's going to restore it, I liked hearing AAA credit rating come up. But the key question, of course, Governor Romney, would be how.

All right. Well, in South Carolina, the race to stop Mitt Romney. Listen to some of his opponents in South Carolina today.

(BEGIN VIDEO CLIPS)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: The idea that he's wrapped the Republican nomination because he won by eight votes in Iowa and he won his home state, it's just silly.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I really don't think that a moderate is going to do a very good job debating Obama. I think the contrast won't be clear enough, the issues won't be clear enough and it will just be -- it will be a jumble.

(END VIDEO CLIPS)

BURNETT: Meanwhile, Mitt Romney is keeping his focus on the president.

(BEGIN VIDEO CLIP)

ROMNEY: This has been a failed presidency. I don't think he's tried to make it bad. He just didn't know what to do. He's over his head.

(END VIDEO CLIP)

BURNETT: South Carolina has picked every Republican nominee since it had a formal primary in 1980.

South Carolina Republican Party Chairman Chad Connelly knows the state better than anyone. He's OUTFRONT tonight.

Good to see you, sir. Appreciate it.

CHAD CONNELLY, SOUTH CAROLINA REPUBLICAN PARTY CHAIRMAN: Hi, Erin. How you doing tonight?

BURNETT: I'm doing well. And you have -- you have the exciting race that everybody's watching like a bunch of hawks. So, you tell me who really is the front-runner. Polls show it to be Mitt Romney. But now, they're all really just showing up in the state.

So, what do you think?

CONNELLY: Well, look, I've watched this thing a long time and there's no question that Governor Romney has some big head speed coming in here. He's got a lot of momentum, but I'll tell you, this thing's wide open. For all these years I've watched this process, it's amazed me to look at the polls two weeks out or 10 days out and see the dynamics and the changes.

So, this is not over. And if you look at the ground games of some of the other campaigns, this thing is still wide open in my view.

BURNETT: What role will religion play? I know it's the stereotype, that religion is important in South Carolina, 60 percent of your voters are evangelicals.

You've got two Catholics running. One who used to be a Baptist and converted. And you've got two Mormons running.

How important is religion?

CONNELLY: Well, you know, it's always an important issue here. Our social conservatives make up a big part of our vote. There's no doubt about it. But I do think right now, more South Carolinians care about jobs and the economy and the situation we're in that President Obama has given us in these last three years.

BURNETT: Who's got the crowd momentum today, you think?

CONNELLY: Well, you know, I did get to go by Governor Romney event just before I came to the studio and there were hundreds of people there. But on Sunday afternoon, I know that Speaker Gingrich had a good crowd. That Senator Santorum had several hundred people at a Chiefs Wings place on Sunday afternoon in Spartanburg, like 500 or 600 people came out.

I know those campaigns have done a good job working the grassroots and getting people engaged.

BURNETT: Well, the wings made me feel a little hungry. All right.

(LAUGHTER)

BURNETT: It's been a long day. You made my stomach start growling. The mike didn't pick it up, though.

All right. Chad Connelly, thanks so much. Appreciate it.

CONNELLY: Thanks, Erin. Have a good night.

BURNETT: All right.

And careful obviously to say positive about several of the candidates, Santorum, Romney and Gingrich there.

With all the focus on South Carolina and Mitt Romney, let's not lose sight of the fact of somebody that he did not mention right there, and this person is really important, Ron Paul. He came in second in New Hampshire after a strong third in Iowa, and listen to what he told our Dana Bash exclusively last night.

(BEGIN VIDEO CLIP)

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Are you not the buffer between Mitt Romney and the rest of the Republican candidates?

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: I don't know what you want to call it, but I know we're next in line to him. So, I would say that we're the only ones really in the race with him.

(END VIDEO CLIP)

BURNETT: And then later on in the night, they were talking about two men, two-man national race, Paul's surrogate coming on our show.

This is Ron Paul's third run for president. Every time, he's had the same message. This man is consistent. This time around, it is resonating with more Republicans than before. He's getting more votes and a lot of passion, a lot of young people.

In 2008, he got 8 percent of the vote in New Hampshire. Last night, he got 23. It's clear Ron Paul inspires passion and he pulls serious numbers.

John Avlon is a CNN contributor. Jamal Simmons is Democratic strategist. Reihan Salam is a columnist for "The Daily" and co-author of "The Grand New Party."

John Avlon, Ron Paul is serious, for a lot of reasons, because he's got serious numbers. But also because I don't get the feeling from talking to his supporters up in New Hampshire that they're eager to, if he doesn't win, jump on a bandwagon of whomever does.

JOHN AVLON, CNN CONTRIBUTOR: That's right. I mean, in an election year in which there's been a lot of musical chairs, people moving around, Ron Paul supporters are steady, they are consistent. They are committed, because they see their candidate being philosophically consistent, making the same case.

And his appeal has snowballed. You know, I mean, the four years ago talking about the Fed and noninterventionist approach to foreign policy at the height of the Bush doctrine, that was courageous, it was unpopular. But to some folks, it's been vindicated.

The key thing is, are any of the others able to make a case to libertarians? Those young voters, those independents who are rallying around Ron Paul, that they can represent those interest? Or is that a deeper schism inside the Republican Party that they're not going to be able to bridge?

BURNETT: I mean, Reihan, is it? I mean, it is also, you know, Ron Paul said it's been 160 -- you know, if anyone from his campaign is watching. I don't remember the number, 163 or 169 times, he's been asked would you run as a third party? And he said he said no.

But it doesn't come off completely firmly and if he did, that would seem to be good for Barack Obama.

REIHAN SALAM, THE DAILY: Well, there's a clear reason why he might not and that's his son, Rand Paul, the senator from Kentucky who may be a viable contender for a future Republican nomination. So, when you think about how this guy has been steadily working, he first ran for president in 1988. This could be the culmination of that strategy.

And that's also why, unlike Gingrich and Santorum and Perry, he's not throwing wild punches at Mitt Romney, which is also --

BURNETT: No, depending them on things.

SALAM: Indeed. BURNETT: Jamal, last night, we had a focus group at CNN South Carolina. They were watching the New Hampshire run returns and they talked about how they voted.

One man said he was undecided. I personally am very skeptical that he was undecided, because at the end of the night, he said my vote's for Ron Paul, and then he was asked, well, what happens if not Ron Paul? And then, he goes, I'm out, not voting for anybody. Barack Obama.

So, Jamal, I want to ask you this -- do you think if Ron Paul does eventually get out of this race that some of those votes could go to Barack Obama?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: I don't know. I don't think so. What I believe is happening here is young people who are voting for Barack Obama are possibly voting for Barack Obama are not participating in these primaries. The people in these primaries are Republicans, are people who are --

BURNETT: Jamal, don't turn down that guy's vote.

SIMMONS: He can come on over -- probably more conservative. And so, what happens, they don't get Ron Paul, what they may do is go find somebody in a third party and vote for them. These are people that kind of -- they want to turn the apple cart over.

What's interesting about Ron Paul to me -- you know, I used to think this race was a lot like 2004, with John Kerry. I'm thinking now is it may have some paralleling to 1988 with Michael Dukakis and Jesse Jackson. Ron Paul wrote about this today at GoVote.com. "Ron Paul maybe starting to pull on the Jesse Jackson mantle where he becomes the choice of people who feel like, well, Romney's going to be the nominee any way, but let me just vote for somebody else, they understand I'm not really on board wit that choice" -- which may cause Romney a lot of trouble the rest of the season.

BURNETT: Does it cost him the general election, John?

AVLON: Look, if Ron Paul runs as a third party candidate, most of those votes probably would come out of the Republican side. But, you know, and it's splitting the anti-Obama vote, which could be dynamic.

But here's what I think is important. Right now, today, there are a lot of people fast-forwarding it to general election. They're buying the Romney camp's line that it's essentially a Romney-Obama race.

Not so fast. Take a deep breath, folks. We are -- two primaries into a long process to which delegates are being given proportionally and they've got to get to 1,143 to get this nomination. So, let's enjoy the process. Let's give the voters of South Carolina, Florida and everyone else their chance and really focus on it. This is what we've been looking forward to. It's happening now in real time. Let's not fast forward. Let's take a deep breath and appreciate the election.

BURNETT: Reihan, what does Mitt Romney do to win over some Ron Paul supporters? Can he do it? Because they seem to just love Ron Paul. Frankly, the things he says are the things that would not be adopted by someone mainstream in the Republican Party, like get rid of the Fed, and cut $1 trillion in year one. No one else is going to say, OK.

SALAM: He doesn't feel threatened by him, because basically, you're talking about a very small number of people in small number of states, and I think that ultimately, Romney's going to get a lot of older folks of that movement and he's going to get a lot of the fiscal conservatives.

BURNETT: All right. Well, thanks very much to all three of you.

SALAM: Thank you.

BURNETT: All right. Let's check with Anderson Cooper.

Anderson, what do you have tonight?

ANDERSON COOPER, HOST, "A.C. 360": Erin, we've got breaking news ahead on the program tonight. A Mississippi judge has just issued an injunction halting the release of any prisoners pardoned by Mississippi Governor Haley Barbour during the last days in office. Barbour gave full pardons to almost 200 criminals, including 14 convicted murderers. Families and victims, as you can understand, were outraged by Barbour's decision. I'm going to speak with Mississippi's attorney general and our Jeffrey Toobin about it.

Also tonight, keeping them honest, the super powerful super PACs with unlimited dollars, very limited accountability. Super PACs, we've seen their influence like never before. We're going to talk to our political panel about how it could affect who wins the White House.

Those stories and tonight's "Ridiculist" at the top of the hour, Erin.

And coming up in tonight's "Outer Circle," to Pakistan, four militants killed in the first drone attack since November.

And the latest from the Casey Anthony case. We learned something today that we'd not known before with all of the media wall-to-wall coverage -- something about her own father sexually abusing her now dead daughter, Caylee.

(COMMERCIAL BREAK)

BURNETT: We do this at the same time every night, our "Outer Circle" -- where we reach out to sources around the world.

And tonight, we begin in Pakistan where four suspected militants were killed by American drones. It was the first strike since 24 Pakistani soldiers were inadvertently killed by an airstrike in November.

We asked Robert Hathaway, director of the Asia Program at the Woodrow Wilson Center what this possibly will mean for already damaged America-Pakistani relations.

(BEGIN VIDEO CLIP)

ROBERT HATHAWAY, ASIA PROGRAM DIRECTOR, WOODROW WILSON CENTER: It will probably make the relationship even worse, but I don't think I'd put too much weight on that. First of all, because the relationship is already so bad that it cannot get much worse without collapsing. And neither party wants that. And secondly, because drone strikes are an old story.

So, I don't think the resumption of the strikes after a hiatus of less than two months is likely to be the straw that breaks the camel's back.

(END VIDEO CLIP)

BURNETT: And now to Peru. Joran van der Sloot, who is a suspect in the disappearance of U.S. teen Natalee Holloway in Aruba, pleading guilty today to the 2010 murder of a Peruvian woman. He will be sentenced on Friday.

We asked Cole Thompson, co-author of the "Portrait of a Monster" if he was surprised about this.

(BEGIN VIDEO CLIP)

COLE THOMPSON, AUTHOR, "PORTRAIT OF A MONSTER": I was a bit surprised that van der Sloot pled guilty today because he's a liar, he's a manipulator, he's a gambler. And I thought if anything, facing 30 years, he'd want to throw a monkey wrench into the system and possibly even try to victimize the families of the girls that he'd kill even more.

(END VIDEO CLIP)

BURNETT: The question that was heard around the world today: Who is killing nuclear scientists in Iran?

Now, the latest victim is Iranian nuclear scientist Mostafa Roshan, who was blown up in his car this morning by a motorcycle hit man. Roshan was a top official at the Natanz uranium enrichment plant and the fourth such victim in two years.

Iran is pointing the finger at Israel and the United States. But America says it is not to blame.

(BEGIN VIDEO CLIP) HILLARY CLINTON, U.S. SECRETARY OF STATE: I want to categorically deny any United States involvement in any kind of act of violence inside Iran.

(END VIDEO CLIP)

BURNETT: So, who is targeting these scientists?

We asked Peter Brookes. He's a national security expert. Here's what he said.

(BEGIN VIDEO CLIP)

PETER BROOKES, HERITAGE FOUNDATION SENIOR FELLOW: My sense it's probably somebody from the region, maybe Israel, maybe an Arab state. You know, both these groups of people do not want to see Iran achieve nuclear weapon statehood.

Another possibility are people within Iran -- Iranian themselves that see this regime as an enemy of the people and certainly don't want to see Iran achieve nuclear weapon statehood while they have a possibility of preventing it.

(END VIDEO CLIP)

BURNETT: Peter said killing key personnel will not stop them from developing nuclear weapons. It will slow them down. We're going to stay OUTFRONT of this story as the world watches. And this is, of course, one of the top issues in the American political election.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: She was the best liar I've ever seen.

(END VIDEO CLIP)

BURNETT: Shocking new details in the Casey Anthony case tonight. A judge unsealed two depositions from the doctors who performed psychological evaluations of the Florida mother.

Now, Anthony, of course, was acquitted last July of killing her 2-year-old daughter, Caylee. But in the documents today, Casey Anthony described seeing her father, George Anthony, holding a soaking wet Caylee, then she says in the deposition, quote, "I think he held her underwater, maybe he was doing something to her and he tried to cover it up."

Well, that's something is the first that we've heard of allegations that Casey Anthony's father sexually abused her daughter, Caylee. Now, some allegations that George Anthony abused Casey herself had raised at her trial and never substantiated.

George Anthony has repeatedly denied the allegations. His attorney issued a statement to OUTFRONT saying, quote, "He never molested any member of his family, including Casey Anthony. And he had nothing to do with the death of Caylee Marie Anthony, including what happened to her remains after she allegedly drowned."

Brad Conway is a former attorney for George and Cindy Anthony. He is OUTFRONT tonight to talk about these new details.

And it's good to have you with us tonight, sir. Let me ask you what you learned today in these documents. Not only did we see for the first time these allegations of abuse of Casey's daughter Caylee, but we also learned that perhaps she became pregnant due to date rape at a party. There were a lot of details in here that we hadn't seen before.

BRAD CONWAY, FORMER DEFENSE ATTORNEY FOR GEORGE AND CINDY ANTHONY: You know, Erin, this is Casey Anthony at her best again. She makes up allegations that are unsubstantiated by anybody but herself. As far as the sexual allegations go involving Caylee, these have never been brought up, not even in court by her own lawyer when he made his opening statement.

BURNETT: And I should point out the defense team, defended the trial, did not use any of the doctors who had evaluated Casey in these depositions. I mean, we did not hear in the trial about allegations of abuse of Caylee. Why not?

CONWAY: Probably two good reasons for that, Erin. Number one, the state attorney in this case is very experienced and on their cross examination of the defense psychiatrist, they would certainly have brought out all of her inconsistencies.

Number two is the state would be able to have their own psychiatric evaluation and their own witness which I'm sure would have been a devastating blow to Casey's case.

BURNETT: Do you think there could be anything to what she's saying? You spent a lot of time with her parents, obviously their relationship, they don't talk, they don't spend time with her. But do you think there could be any truth to her story?

CONWAY: Absolutely not, Erin. Absolutely 100 percent not. George Anthony is a good man. There was no evidence of sexual abuse in that family whatsoever at any time from anybody other than Casey. And for her to make that claim in detail in these evaluations that the psychiatrist did, and then for the defense not to use them I think says a lot about the defense's own doubt as to her credibility and her statements.

BURNETT: Have you seen any of the video diary she made? We showed viewers a little of that, she looks very different now with the short blonde hair. Have you, sir, seen that diary and what's your impression?

CONWAY: Yes, Erin, I have. And again, Casey Anthony's statements are always self serving. They're always out for Casey and always out to protect her. And typically they portray her as -- poor me, poor Casey, I'm the victim, nobody else.

BURNETT: All right. Well, thank you very much, sir. We appreciate your being with us tonight.

CONWAY: My pleasure, Erin. Thank you.

BURNETT: All right. There are two Catholics and there are two Mormons left in the GOP field. Does their faith matter? That's next.

(COMMERCIAL BREAK)

BURNETT: Today on my way back to New York from Atlanta, I saw one of the now ubiquitous Mormon.org ads. Now, you have probably seen these around. They're everywhere. They are on billboards, buses and TV.

And they all lead you to Mormon.org, the Church of Latter Day Saints' official Web site where you can learn all about the life and faith of Mormons -- just like Rich here, one of the people we clicked on. You could read about what he does, and how he lives.

Currently, the second fastest growing religion in the United States, the Church of Latter Day Saints has been going all out to win America over.

And now, with Mitt Romney as the frontrunner in the GOP field, I stopped to consider what they've accomplished since the last time he ran four years ago. In 2008, HBO's polygamy drama "Big Love" was on the air. A lot of Americans seem (ph) to vote for any candidate of that particular faith.

This time around, we have another Mormon hit, the Broadway musical "Book of Mormon." And even though the Pew Forum reports that about a quarter of Americans still have a negative opinion of the Mormon faith, it seems like we have come a long way. In the current GOP field, we have two Catholics and two Mormons running. Wow. That's a field that would have been unrecognizable when this man ran for president.

(BEGIN VIDEO CLIP)

JOHN F. KENNEDY, FORMER U.S. PRESIDENT: My judgment is that an American who is a Catholic, who is as sensitive as a Catholic must be who seeks this high office, as exposed to the pressures which swirl around us, that he will be extremely diligent in his protection of the constitutional separation.

(END VIDEO CLIP)

BURNETT: John F. Kennedy didn't think his religion should have anything to do whether he could lead. And when he was elected, America overcame a huge hurdle. It wasn't the last though. Think about three-and-a-half years ago when Mitt Romney was still trying to overcome stereotypes about Mormonism. American overcame another hurdle and inspired the world by electing a man they didn't think race should have anything to do with whether he could lead.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My general attitude is that whether you're white, black, Hispanic, Asian, whatever demographic you come from, we all have a stake in making sure we don't have young people who are shooting each other on the streets. If I'm talking about those issues in general terms, then I hope that I'm not just appealing to the African-American vote when I say something like that.

(END VIDEO CLIP)

BURNETT: However you feel about their politics, the increasing diversity, whether it'd be race or religion is something to celebrate. We have come a long way since JFK. I mean, we were looking at tapes today when all kinds of people were asking him questions about what the pope said about this and what the pope said about that. Hopefully, we're going to continue to move ahead, because American is still a beacon for freedom and tolerance.

It has been interesting over the past few days, covering Iowa and New Hampshire and looking at exit polls and how evangelicals are voting for Catholics and for Mormons, and faith and family matter, but religion different than it used to be. It's probably a really good thing.

Well, tomorrow, South Carolina Senator Jim DeMint is going to come OUTFRONT. We're going to talk to him about the South Carolina primary, the economy, and a whole lot more. He is pretty passionate about one specific thing. We're going to get to the bottom of that. That is tomorrow, 7:11 (ph) -- 7:11, OUTFRONT. Be there.